Question
. The Terrapins Investment Fund has a total investment of $500 million in five stocks. Stock Investment (millions) Beta 1 $150 .6 2 120 1.2
. The Terrapins Investment Fund has a total investment of $500 million in five stocks.
| Stock | Investment (millions) | Beta |
| 1 | $150 | .6 |
| 2 | 120 | 1.2 |
| 3 | 80 | 3.0 |
| 4 | 90 | 1.8 |
| 5 | 60 | 1.0 |
| Total | $500 |
. Refer to the problem above. If the risk-free rate is 12% and the market risk premium is 6%, what is the required return on the Terrapins Fund?
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Financial Management For Decision Making
Authors: Harold Jr. Bierman, Seymour Smidt
1st Edition
1587982129, 9781587982125
